Home Depot Helps Move Solar Panels In Northeast

It was the holy grail of solar. Get solar panels on the shelves of a big-box store like Home Depot where do-it-yourselfers shop for home improvement projects, and the solar industry could tap a whole new class of customers.

Except it didn’t really happen that way — at first.

In 2001, Home Depot started stocking its shelves with panels from AstroPower (a company that eventually became GE Solar after going bankrupt). Then, in 2004, Home Depot partnered with BP Solar to offer solar panels and solar installation through the store’s brand. But without a compelling financial offering, the service didn’t take off in a big way.

Fast-forward to 2010. As BP was on the verge of pulling out of the solar market, a range of new solar service providers started making big gains. Recognizing the potential for offering a better service rather than just a product on its shelves, Home Depot partnered with SolarCity in West Coast stores. SolarCity declined to talk with Greentech Media about the specifics of their business relationship with Home Depot, but CEO Lyndon Rive has been publicly bullish about the offering.

Soon after, Home Depot expanded solar service offerings to the East Coast by partnering with two other fast-growing providers, Sunrun and Clean Power Finance.

The experience of Roof Diagnostics Solar — a leading contractor partnering with Sunrun, Clean Power Finance, and Home Depot on the East Coast — offers a window into how these arrangements are boosting solar sales.

A year and a half ago, Roof Diagnostics participated in a Home Depot pilot program with one other company in fourteen New Jersey stores. It set out a kiosk with a laptop, 40-inch television, and a solar specialist who could do a simple assessment of a home from the store.

The immediate reaction was “explosive,” said Pegler Jr., with 68 sales coming in the first 60 days. A couple weeks later, they were given twenty-one stores. And the company will be offering solar in 100 locations by the end of the year in New Jersey, New York, Pennsylvania, and Massachusetts — with most of those kiosks located in the first aisle of the stores.

“Home Depot brings a lot of foot traffic,” he said. “They could put anything in the front of the store, but they’re choosing solar. We had to do it store by store and earn their respect.”

Starting off in New Jersey, the first 40 stores pulled in about $15 million in gross revenue. And new locations have brought in about $1 million in sales per year, said Pegler Jr.

Before setting up shop in Home Depot, Roof Diagnostics was doing 100 sales per month in New Jersey. Now the company is closing 150 sales a month, with 125 of them through the Home Depot process. In 2010, the company had 28 employees; today, it has 265.

“The company has gone from a relatively unknown New Jersey installer to the second largest in the state — just behind Trinity Solar, another Sunrun partner which passed up the opportunity to participate in the Home Depot pilot program,” said Andrew Krulewitz, a solar market analyst at GTM Research. “In other growing markets, such as Massachusetts and New York, this Home Depot relationship will allow Roof Diagnostics to keep pace with the likes of SolarCity and Astrum Solar, another major East Coast player.”

Four out of every ten people who visit the Home Depot kiosk sign up for a solar lease or power purchase agreement with Roof Diagnostics. Pegler Jr. believes it’s a sign that the Northeastern solar market is maturing. Because states like New Jersey, New York, Pennsylvania, and Massachusetts have strong solar programs, consumers generally know about the opportunity. But seeing a kiosk in a Home Depot store can be the difference between someone thinking about solar and actually taking action.

“These markets are getting bigger, but they’re not saturated enough to where a lot of customers will approach you on their own. Sometimes all they needed was that little bit of a nudge,” said Pegler Jr. “That’s tipped the scale for us. This is a story about solar breaking into the mainstream.”

The early experiments in Home Depot stores more than a decade ago didn’t pan out as expected. But new financing tools, quote platforms, and falling installation costs have finally broadened offerings to a new class of customers doing home improvement shopping.

“In mature state markets, such as New Jersey and California, the key to continued growth of the domestic solar industry is moving past early adopters. This Home Depot relationship allows solar providers to do so,” said GTM’s Krulewitz. “Solar providers who seek out these non-traditional sales channels are the ones who will net the most new customers, and as of right now, word of mouth is the best lead generation tool that solar providers have.”

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